Can Electric Cars Win Over Consumers in 2012?

Electric vehicles failed to gain traction in the mainstream market last year, which saw lackluster sales for the industry's first arrivals, the Chevy Volt and the Nissan Leaf.

Will 2012 be any better? Depends who you ask, but the general consensus in the first week of this year is probably not.

In a survey of global auto executives released Thursday by KPMG LLP, an audit, tax and advisory firm, nearly two thirds of respondents said plug-in hybrids and all-electric cars won't make a dent in car sales until at least 2025. By then E.V.'s could rise to 15 percent of total car sales, according to the most optimistic projections.

The main reason for the pessimism is low consumer demand. In the United States consumer interest is actually declining, according to Pike Research, which surveyed more than 1,000 Americans for a report published Thursday. Forty percent of respondents were "extremely" or "very" interested in buying an electric car in 2011, down from 44 percent in 2010 and 48 percent the year before.

The biggest deterrent, respondents said, is cost. The gas-electric Chevy Volt sells for roughly $40,000 and the all-electric Nissan Leaf starts around $35,000. By contrast, a fuel-efficient gas-powered compact car, like the Chevy Cruze, can cost half that.

Not everyone is pessimistic though. New models of E.V.'s are hitting showrooms, and that could be a sales catalyst, Rob Bailer of Leaf Clean Energy, a renewable energy and sustainable technology investment firm, told InsideClimate News. The all-electric Ford Focus rolled out in California, New York and New Jersey late last year, with 16 other states set to get the cars in the second quarter of 2012. Toyota's Prius Plug-in will be sold in 14 states in the first half of this year. California and Oregon residents will be able to buy the all-electric Honda Fit by summer.

"People are going to start to adopt more," Bailer predicted.

But the Chevy Volt and Nissan Leaf missed their 2011 sales goals, fueling speculation that the new releases won't fare much better.

Nissan, which set a 10,000-car target last year, almost hit its mark, selling 9,674 of its all-electric Leafs. General Motors fell short of its Chevy Volt goal, selling just 7,671 plug-in hybrids of its 10,000-unit target.

Total E.V. sales reached around 20,000 in the United States, just two percent of the Obama administration's plan to put one million electric cars on the road by 2015.

Republican lawmakers who oppose Obama's clean vehicles agenda have pointed to disappointing sales as a reason to revoke tax credits for the carbon-free cars. The government offers first-time buyers a $7,500 subsidy. Last week, Rep. Mike Kelly (R-Pa.) introduced legislation to end the incentive, citing the Volt's missed sales target.

A Washington Post editorial this week agreed. Such tax credits "represent a deepening of the taxpayers' commitment to what looks increasingly like an industry not ready for prime time," the paper wrote.

In a response, Media Matters, a progressive media watchdog, said the editorial fails to recognize that "lawmakers supported electric cars because they are not already a well-established technology, not in spite of that fact."

EPA Dramatically Cuts Target for Cellulosic Ethanol, Again

America's cellulosic biofuels industry got off to a disheartening start to the New Year, when the U.S. Environmental Protection Agency slashed the target for the next-gen fuel source by 98 percent over what was required under federal law.

EPA announced last week that it expects just 8.65 million gallons of cellulosic ethanol to be blended into the nation's fuels in 2012, a tiny fraction of the 500 million gallons that was mandated by the 2007 Energy Independence and Security Act.

The energy act directs oil refiners to boost the amount of biofuels in their blends from 9 billion gallons in 2008 to 36 billion gallons by 2022. A massive 16 billion gallons must come from switchgrass, corncobs, husks and other inedible cellulosic plant parts. The idea was to prevent an overdependence on corn-based ethanol, which is heavily criticized for reducing food supplies.

To keep the industry on track to deliver the rapid expansion, EPA must set minimum requirements every year, known as the renewable fuel standard. For 2012 the goal is to add 18 billion gallons of total biofuel, just under 10 percent of the nation's motor fuel. More than half of that will come from corn; one-tenth of one percent will be cellulosic biofuel.

EPA has dramatically cut the cellulosic goal every year for the last three years, raising ire among renewable fuel advocates, who say the reduction in cellulosic numbers sends a chilling signal to financial markets, which depend on long-term clarity from the government. Ethanol plants can cost $100 million to construct and take several years to build.

But EPA says it didn't have a choice. There's only one commercial-scale cellulosic plant up and running, a converted corn ethanol plant in Blairstown, Iowa. Overall, more than 200 ethanol plants are operating nationwide, almost all of them making fuel from corn.

This year's markdown has also angered the country's oil producers.

The renewable fuel standard requires that when there isn't enough cellulosic ethanol available for purchase, oil producers must buy "waiver credits" from EPA in lieu of actual biofuel. In 2010 and 2011, oil companies bought some $10 million in credits, the Wall Street Journal reported.

Oil companies say it's unfair to penalize them for the cellulosic industry's failure to get off the ground. "Refiners are being ordered to use a substance that is not being produced in commercial quantities—cellulosic ethanol—and are being required to pay millions of dollars for failing to use this nonexistent substance," said Charles Drevna, president of the National Petrochemical and Refiners Association, according to the Journal.

At the same time the corn ethanol industry seems unphased by the expiration of a 30-year-old federal tax credit on Dec. 30, the New York Times reported. The government provided oil refiners 45 cents for every gallon of ethanol that they blended into gasoline, totaling $6 billion in credits each year. "The marketplace has evolved. The tax incentive is less necessary now than it was just two years ago. Ethanol is 10 percent of the nation’s gasoline supply," said Matthew Hartwig, a spokesperson for the Renewable Fuels Association, an ethanol lobbying group.

U.S. Wind Manufacturers Say China, Vietnam Violating Trade Rules

Four American makers of wind power parts last week filed a petition with the U.S. International Trade Commission and Department of Commerce to investigate whether Chinese and Vietnamese manufacturers are breaking trade rules in order to snag sales from the U.S. market.

The firms, which make steel towers for turbines, accused their Asian counterparts of using billions in government subsidies to sell towers in the United States at two-thirds of what it costs to produce them, making it impossible for American companies to compete, Bloomberg reported. They are seeking tariffs of around 60 percent on the imports to make up the difference.

The petition is the latest rumble in a trade dispute that began in October when seven American makers of solar panels accused Chinese competitors of dumping illegally subsidized panels into U.S. market. The American group asked officials to slap a tariff of more than 100 percent on Chinese solar panels.

The trade complaints are part of two parallel debates raging in Washington. One, the future of America's clean energy industry in the wake of Solyndra, the California solar firm that received a $535 million federal loan guarantee before going bankrupt last summer. And the other, how to handle China's aggressive trade practices that put costlier U.S. goods at a disadvantage.

The Obama administration has berated Republicans for trying to cut green energy spending at a time when China is emerging as the center of clean energy manufacturing. In 2010, Chinese solar panel manufacturers churned out more than half of the world's solar cells. That year, China overtook the United States as the world's largest maker of wind turbines.

Currently, about half of the steel towers used in wind turbines in the United States are made by American companies—almost entirely by the four firms behind the trade complaint. Imports from China and Vietnam make up most of the rest, and rising. China now has more than 100 producers of wind towers.

"Chinese and Vietnamese imports of wind towers have escalated significantly, costing U.S. manufacturers sales and injuring American workers," said Alan Price, a lawyer at Wiley Rein, in a statement. The firm represents the wind tower makers and also filed the solar complaint.

The United Steelworkers applauded the wind tower trade case. "We are encouraged that domestic producers of wind towers are standing up to fight unfair trade practices by foreign producers in renewable energy products," union spokesperson Gary Hubbard told the New York Times.

The Commerce Department has until later this month to decide whether to open an investigation into the wind complaint. A final determination on tariffs by the department could take a year. For the solar industry complaint, the Commerce Department is set to make a preliminary decision on a tariff on Feb. 13, Bloomberg reported.

On our radar for next week:

Solar Advocates Gearing Up for a Fight in 2012

The U.S. solar industry is doubling its resolve in 2012 after the collapse of Solyndra opened the sector to attacks from mostly Republican policymakers opposed to Obama's green energy push. The Solar Energy Industry Association (SEIA), a national trade group, and the Solar Alliance, a state-level advocacy organization, announced Wednesday that the groups had merged under the SEIA brand. Next week, leaders from both groups are set to speak out about what's next for the industry.

Battle Over California's Low-Carbon Standard to Heat Up

On Thursday, state officials appealed a recent ban on California's low-carbon fuel standard, a first-in-the-world policy that requires oil companies to reduce greenhouse gas emissions from the motor fuels they produce. Oil companies sued the state over the rule in 2010, and in late December, a federal judge ruled to block its enforcement until the lawsuit is resolved in 2013. Along with the appeal, California officials are expected to request a stay on the judge's ban sometime next week.

InsideClimate News intern Zoe Schlanger contributed research to this report.

Can Electric Cars Win Over Consumers in 2012?

Electric vehicles failed to gain traction in the mainstream market last year, which saw lackluster sales for the industry's first arrivals, the Chevy Volt and the Nissan Leaf.

Will 2012 be any better? Depends who you ask, but the general consensus in the first week of this year is probably not.

In a survey of global auto executives released Thursday by KPMG LLP, an audit, tax and advisory firm, nearly two thirds of respondents said plug-in hybrids and all-electric cars won't make a dent in car sales until at least 2025. By then E.V.'s could rise to 15 percent of total car sales, according to the most optimistic projections.

The main reason for the pessimism is low consumer demand. In the United States consumer interest is actually declining, according to Pike Research, which surveyed more than 1,000 Americans for a report published Thursday. Forty percent of respondents were "extremely" or "very" interested in buying an electric car in 2011, down from 44 percent in 2010 and 48 percent the year before.

The biggest deterrent, respondents said, is cost. The gas-electric Chevy Volt sells for roughly $40,000 and the all-electric Nissan Leaf starts around $35,000. By contrast, a fuel-efficient gas-powered compact car, like the Chevy Cruze, can cost half that.

Not everyone is pessimistic though. New models of E.V.'s are hitting showrooms, and that could be a sales catalyst, Rob Bailer of Leaf Clean Energy, a renewable energy and sustainable technology investment firm, told InsideClimate News. The all-electric Ford Focus rolled out in California, New York and New Jersey late last year, with 16 other states set to get the cars in the second quarter of 2012. Toyota's Prius Plug-in will be sold in 14 states in the first half of this year. California and Oregon residents will be able to buy the all-electric Honda Fit by summer.

"People are going to start to adopt more," Bailer predicted.

But the Chevy Volt and Nissan Leaf missed their 2011 sales goals, fueling speculation that the new releases won't fare much better.

Nissan, which set a 10,000-car target last year, almost hit its mark, selling 9,674 of its all-electric Leafs. General Motors fell short of its Chevy Volt goal, selling just 7,671 plug-in hybrids of its 10,000-unit target.

Total E.V. sales reached around 20,000 in the United States, just two percent of the Obama administration's plan to put one million electric cars on the road by 2015.

Republican lawmakers who oppose Obama's clean vehicles agenda have pointed to disappointing sales as a reason to revoke tax credits for the carbon-free cars. The government offers first-time buyers a $7,500 subsidy. Last week, Rep. Mike Kelly (R-Pa.) introduced legislation to end the incentive, citing the Volt's missed sales target.

A Washington Post editorial this week agreed. Such tax credits "represent a deepening of the taxpayers' commitment to what looks increasingly like an industry not ready for prime time," the paper wrote.

In a response, Media Matters, a progressive media watchdog, said the editorial fails to recognize that "lawmakers supported electric cars because they are not already a well-established technology, not in spite of that fact."

EPA Dramatically Cuts Target for Cellulosic Ethanol, Again

America's cellulosic biofuels industry got off to a disheartening start to the New Year, when the U.S. Environmental Protection Agency slashed the target for the next-gen fuel source by 98 percent over what was required under federal law.

EPA announced last week that it expects just 8.65 million gallons of cellulosic ethanol to be blended into the nation's fuels in 2012, a tiny fraction of the 500 million gallons that was mandated by the 2007 Energy Independence and Security Act.

The energy act directs oil refiners to boost the amount of biofuels in their blends from 9 billion gallons in 2008 to 36 billion gallons by 2022. A massive 16 billion gallons must come from switchgrass, corncobs, husks and other inedible cellulosic plant parts. The idea was to prevent an overdependence on corn-based ethanol, which is heavily criticized for reducing food supplies.

To keep the industry on track to deliver the rapid expansion, EPA must set minimum requirements every year, known as the renewable fuel standard. For 2012 the goal is to add 18 billion gallons of total biofuel, just under 10 percent of the nation's motor fuel. More than half of that will come from corn; one-tenth of one percent will be cellulosic biofuel.

EPA has dramatically cut the cellulosic goal every year for the last three years, raising ire among renewable fuel advocates, who say the reduction in cellulosic numbers sends a chilling signal to financial markets, which depend on long-term clarity from the government. Ethanol plants can cost $100 million to construct and take several years to build.

But EPA says it didn't have a choice. There's only one commercial-scale cellulosic plant up and running, a converted corn ethanol plant in Blairstown, Iowa. Overall, more than 200 ethanol plants are operating nationwide, almost all of them making fuel from corn.

This year's markdown has also angered the country's oil producers.

The renewable fuel standard requires that when there isn't enough cellulosic ethanol available for purchase, oil producers must buy "waiver credits" from EPA in lieu of actual biofuel. In 2010 and 2011, oil companies bought some $10 million in credits, the Wall Street Journal reported.

Oil companies say it's unfair to penalize them for the cellulosic industry's failure to get off the ground. "Refiners are being ordered to use a substance that is not being produced in commercial quantities—cellulosic ethanol—and are being required to pay millions of dollars for failing to use this nonexistent substance," said Charles Drevna, president of the National Petrochemical and Refiners Association, according to the Journal.

At the same time the corn ethanol industry seems unphased by the expiration of a 30-year-old federal tax credit on Dec. 30, the New York Times reported. The government provided oil refiners 45 cents for every gallon of ethanol that they blended into gasoline, totaling $6 billion in credits each year. "The marketplace has evolved. The tax incentive is less necessary now than it was just two years ago. Ethanol is 10 percent of the nation’s gasoline supply," said Matthew Hartwig, a spokesperson for the Renewable Fuels Association, an ethanol lobbying group.

U.S. Wind Manufacturers Say China, Vietnam Violating Trade Rules

Four American makers of wind power parts last week filed a petition with the U.S. International Trade Commission and Department of Commerce to investigate whether Chinese and Vietnamese manufacturers are breaking trade rules in order to snag sales from the U.S. market.

The firms, which make steel towers for turbines, accused their Asian counterparts of using billions in government subsidies to sell towers in the United States at two-thirds of what it costs to produce them, making it impossible for American companies to compete, Bloomberg reported. They are seeking tariffs of around 60 percent on the imports to make up the difference.

The petition is the latest rumble in a trade dispute that began in October when seven American makers of solar panels accused Chinese competitors of dumping illegally subsidized panels into U.S. market. The American group asked officials to slap a tariff of more than 100 percent on Chinese solar panels.

The trade complaints are part of two parallel debates raging in Washington. One, the future of America's clean energy industry in the wake of Solyndra, the California solar firm that received a $535 million federal loan guarantee before going bankrupt last summer. And the other, how to handle China's aggressive trade practices that put costlier U.S. goods at a disadvantage.

The Obama administration has berated Republicans for trying to cut green energy spending at a time when China is emerging as the center of clean energy manufacturing. In 2010, Chinese solar panel manufacturers churned out more than half of the world's solar cells. That year, China overtook the United States as the world's largest maker of wind turbines.

Currently, about half of the steel towers used in wind turbines in the United States are made by American companies—almost entirely by the four firms behind the trade complaint. Imports from China and Vietnam make up most of the rest, and rising. China now has more than 100 producers of wind towers.

"Chinese and Vietnamese imports of wind towers have escalated significantly, costing U.S. manufacturers sales and injuring American workers," said Alan Price, a lawyer at Wiley Rein, in a statement. The firm represents the wind tower makers and also filed the solar complaint.

The United Steelworkers applauded the wind tower trade case. "We are encouraged that domestic producers of wind towers are standing up to fight unfair trade practices by foreign producers in renewable energy products," union spokesperson Gary Hubbard told the New York Times.

The Commerce Department has until later this month to decide whether to open an investigation into the wind complaint. A final determination on tariffs by the department could take a year. For the solar industry complaint, the Commerce Department is set to make a preliminary decision on a tariff on Feb. 13, Bloomberg reported.

On our radar for next week:

Solar Advocates Gearing Up for a Fight in 2012

The U.S. solar industry is doubling its resolve in 2012 after the collapse of Solyndra opened the sector to attacks from mostly Republican policymakers opposed to Obama's green energy push. The Solar Energy Industry Association (SEIA), a national trade group, and the Solar Alliance, a state-level advocacy organization, announced Wednesday that the groups had merged under the SEIA brand. Next week, leaders from both groups are set to speak out about what's next for the industry.

Battle Over California's Low-Carbon Standard to Heat Up

On Thursday, state officials appealed a recent ban on California's low-carbon fuel standard, a first-in-the-world policy that requires oil companies to reduce greenhouse gas emissions from the motor fuels they produce. Oil companies sued the state over the rule in 2010, and in late December, a federal judge ruled to block its enforcement until the lawsuit is resolved in 2013. Along with the appeal, California officials are expected to request a stay on the judge's ban sometime next week.

InsideClimate News intern Zoe Schlanger contributed research to this report.